Understanding Human Resource Outsourcing
“On the average, Companies that outsource their workforce/personnel to Professional Outsourcing companies perform twice as much better than their Competitors who don’t Outsource at all” – Tayo Oluwole, CTO at Talents and Skills Africa Consulting LLC
When a business organization decides to outsource some or all its human resource functions, there is always this fear that it’s going to lose control of its business processes. That is one of the myths believed by people and it has been affecting the decision of organizations.
So understanding human resource outsourcing is key before deciding to outsource.
What Is Human Resource Outsourcing?
Human resource outsourcing is a system in which a third-party organization is engaged to be responsible for carrying out the human resource functions of a business giving the business room to concentrate greatly on growth-related objectives.
Some of the specific tasks carried out under the human resource outsourcing process include human resources/personnel management, payroll services, recruitment, tax/accounting services, background investigation services, etc.
Does Acquiring The Services Of Human Resource Outsourcing Equal To Loss Of Business Control?
It is often believed that employing the service of a human resource outsourcing company or agency leads to the loss of business control. This has been proven to be false because employing the service of a human resource outsourcing agency does not mean you are going to be handing over your business to them.
With a human resource outsourcing agency, you decide the number of human resource functions you want to outsource.
The mix-up between Human Resource outsourcing and Professional Employer Organizations is why people do not want to engage the service of a Human Resource agency.
A Professional Employer organization is an organization that enters into a joint employment relationship with the employer by leasing employees to the employers, thereby allowing PEO to share and manage many employee-related responsibilities and liabilities.
On the other hand, human resource outsourcing is a contractual agreement between the organization and a human resource outsourcing agency to carry out the human resource functions in their stead.
PEO’s share in the risk involved in the business while a human resource outsourcing agency does not share in the risk because they do not own the employees. The employees belong to the organization and not the outsourcing agency.
Benefits Of Human Resource Outsourcing.
Cost-savings and Strategic Growth: One of the major benefits of human resource outsourcing is that outsourcing some or all of your HR functions means that you can free up time to focus on more pressing needs of the company i.e. other growth-related objectives. This leads to growth and scalability.
Consistent Pool of Talents/Workforce: Secondly, HR outsourcing can exceptionally curtail the challenges of finding talented professionals. HR outsourcing simplifies the recruitment and onboarding process while ensuring you hire the best candidate out there.
Risk-free Operations and Compliance Management: Also, outsourcing some or all your HR functions allows you to stay compliant with employment laws. As employment laws keep changing, it might be difficult to keep up with it. An HR outsourcing company will make sure that your business is in compliance with all relevant employment laws/regulations.
Happy and Engaged Employees: Happy employees are more likely to stay with a company for the longest time. An HR outsourcing company can help you create a positive work environment and improve your employee retention rate. By taking care of your employees, they can help you keep the best talent and reduce turnover.
Summarily, an HR outsourcing company can improve your company’s image by creating a positive work environment and developing policies that are aligned with your business goals.
